US finance giant Oaktree Capital Management and Bristol-based firm, The Serviced Apartment Company (Saco) have joined forces to create a £60m serviced apartments business, the pair announced yesterday.
The deal will see Saco merge with Oaktree’s serviced flats business, creating a portfolio of 1,645 apartments in the UK and Europe. This includes a pipeline of 945 flats in 10 properties due to open from December this year in cities including in London, Amsterdam, and Edinburgh.
The new company will operate under the Saco brand. However, it will also launch a new brand called Beyonder aimed at younger millenial travellers in contrast to the more traditional Saco flats.
The first Beyonder ApartHotel is due to open in London in December.
Demand for serviced apartments has boomed in recent years on the back of new entrants such as Airbnb shaking up the market.
“There is a growing awareness of serviced apartments as an alternative to hotels,” Saco’s marketing director Jo Redman told City A.M.
“We have seen Airbnb come into the market place as a digital disruptor and it has elevated the concept, with more and more leisure and business travellers using serviced flats,” she added.
Holiday-goers only make up around a quarter of Saco’s customers overall, although this varies from city to city. For example, in Bath they make up 75 per cent of the customers compared with only 25 per cent in London.
However Redman said this number was growing as more people opt to stay in flats on City breaks: “People are very used to [renting properties] when going to the country or the seaside, and now they realise they can do it in key cities centres and live more like a local.”
Saco’s agency business, which manages 30,000 flats in 52 countries, will also form part of the merger with Oaktree.